Carrier vows to be 'prepared for the demand,' but pace prompts concerns

That's one of the key questions facing U.S. government agencies and corporations as they scramble to deploy next-generation Internet technology ahead of the fast-approaching exhaustion of IP addresses using the current standard, known as IPv4.

AT&T says it has some IPv6 services available to its enterprise customers today, and that it will be ready with a suite of IPv6 offerings for its enterprise and residential customers before market demand arrives.

But IPv6 proponents, Internet industry observers and even some AT&T rivals are worrying that AT&T is a laggard in upgrading its massive network infrastructure to support the new standard. These sources say that any delay in AT&T's support of IPv6 could impact the Internet infrastructure overall, as well as the competitiveness of U.S. e-commerce companies.

There's no question that AT&T is taking a lower profile about next-generation Internet services than its rivals and hosting later public trials of IPv6 than Comcast and Verizon.

"I'm surprised AT&T is not talking about IPv6 more," says Tim Winters, senior manager at the University of New Hampshire's InterOperability Lab, which is a premier IPv6 product testing facility. "I haven't heard of any vendors trying to get into AT&T's network and needing to do IPv6 testing. We've heard from vendors making CPE or set-top boxes for Verizon and Comcast."

AT&T also appears to lag behind smaller carriers such as Hurricane Electric, NTT America and Global Crossing, which have offered native IPv6 services in the United States for several years and have large customers they talk about publicly.

"What AT&T says about their business customers is that they have other priorities that they need to spend their network investment dollars on besides IPv6," says Melanie Posey, vice president for hosting and managed network services research at IDC. "I'm not sure if they are waiting for everybody else to move more aggressively to IPv6 and that is what will force them into it. I get the feeling that is their strategy to the extent they have a strategy."

IPv4 address depletion looms

IPv6 is the long-anticipated upgrade to the Internet's main communications protocol, which is known as IPv4. uses 32-bit addresses and can support 4.3 billion devices connected directly to the Internet. IPv6 , on the other hand, uses 128-bit addresses and supports a virtually unlimited number of devices – 2 to the 128th power.

Less than 5% of IPv4 addresses are still available as of last week, according to the regional Internet registries that allocate IPv4 and IPv6 address space to carriers. Experts predict that the registries will hand out the remaining IPv4 addresses by the end of 2011, leading to full-fledged IPv4 address depletion.

Once IPv4 addresses are depleted, ISPs must give their new customers IPv6 addresses or use carrier-grade network address translation (NAT) to share a single IPv4 address among multiple customers. Carrier-grade NAT is expected to result in slower performing, more costly and more complicated network services than native IPv6 services.

The issue of where AT&T stands on IPv6 deployment is important because this carrier has such a huge share of the U.S. telecom market.

"Depending on how you count it, AT&T has about 35% of the enterprise market in the U.S.," Posey says.

AT&T's share of the U.S. federal market is even larger, making the carrier's IPv6 product road map a critical factor in whether federal agencies can meet their new September 2012 deadline for supporting IPv6 on their public-facing Web sites.

In the U.S. government's fiscal year 2009, AT&T "was awarded approximately $535 million in prime contracts," says Ray Bjorklund, senior vice president of Federal Sources, a market research firm. "Among AT&T, Verizon, Sprint and Qwest, AT&T's share of prime contracts was about 49%."

AT&T is one of five carriers – along with Verizon, Qwest, Sprint and Level 3 – that have contracts under the U.S. government's Networx program, which will be the primary contracting vehicle for federal agencies to purchase IPv6-based telecom services over the next decade.

"AT&T is absolutely behind," says an executive with a rival ISP that is marketing its IPv6 offerings to AT&T's business customers to lure them away from the carrier. "This is a major, major problem for the U.S. government. If I were at the [General Services Administration] or the [Office of Management and Budget], I would turn around and say to the five Networx entities: You need to buck up and do the IPv6 work. Verizon is doing good stuff. Sprint is doing good stuff. We see that Level 3 is doing real stuff. Qwest at least has their marketing act together…I'd love to think that AT&T is doing something with IPv6 in stealth mode, but my experience has told me otherwise.''

Low profile on IPv6

AT&T is taking a lower profile regarding IPv6 than rivals such as Comcast and Verizon, both of whom have announced public trials of IPv6 and regularly update the press, standards bodies and network industry groups about the status of these trials.

AT&T was conspicuous in its absence at a National Telecommunications and Information Administration (NTIA) workshop on IPv6 that was held in Washington, D.C. in September. Representatives of Comcast and Verizon spoke on the NTIA's industry panel, along with leading content delivery network Akamai and video giant Google.

The same week, AT&T also went missing at a cable industry event in New York City focused on IPv6 deployment.

AT&T executives acknowledge they haven't been talking about IPv6 as much as rival carriers, but they insist they will be ready with robust IPv6 service when IPv4 address depletion occurs.

"We've really timed our work efforts around" IPv4 address depletion, says Brooks Fitzsimmons, assistant vice president of IPv6 transition at AT&T. "Is AT&T stirring demand for IPv6? No. Are we making sure we are prepared for the demand? Yes."

AT&T has IPv6 offerings for enterprise customers, but it won't say how many IPv6 customers it has or who they are.

AT&T offers dual stack VPN and managed Internet access services on its Multi-Protocol Label Service (MPLS) backbone that are IPv6 capable. AT&T says it plans to support IPv6 on its mobile network, too.

AT&T also offers consulting services to help enterprises upgrade network hardware, software and applications to support the new addressing scheme.

"IPv6 is not something that AT&T talks about a lot," Posey says. "As far as services go, sometime during the summer they came out with a consulting service that helps customers get a handle on what it is they need to do to prepare for IPv6. They have an IPv6 tunneling gateway, and they have an overlay IPv6 network that they put in some of their [points of presence] in dual stack mode."

An AT&T executive did speak at Google's IPv6 Implementers Conference in June, explaining that the carrier will transition its broadband network to IPv6 using 6rd, a technique for tunneling IPv6 traffic over an IPv4 network that was pioneered by French ISP Free.

This schedule puts AT&T at least nine months behind Comcast and Verizon in public trials of IPv6 for residential customers.

Comcast began its public trial of three different IPv6 transition mechanisms including 6rd in April. Comcast's nine-month-long IPv6 trial has attracted 7,000 business and residential customers nationwide, and the carrier has committed to having its network support IPv6 by 2012.

Verizon also held a much smaller month-long trial of IPv6-enabled FiOS services in April. The trial included about a dozen Verizon employees located in northern Virginia.

Despite its delayed trial, AT&T says it will have a full-production launch of residential IPv6 services in the fourth quarter of 2011.

"I don't know the details of the trials yet," Fitzsimmons says. "I know we will have a controlled introduction of our IPv6 services. I don't have the details on that yet either."

AT&T says it is not going to adopt dual-stack mode – where native IPv6 and IPv4 services run side-by side – for its residential customers.

"We're going into address conservation mode, which is the guidance of [the American Registry for Internet Numbers],'' Fitzsimmons says. "We're stemming the consumption of IPv4 addresses for both our enterprise customers and any customers paying for static IP addresses. … For the gross majority of our customers, as they go through IPv6 testing and trials, the majority of our customers will take advantage of carrier-grade NAT."

AT&T does offer dual-stack capabilities to its enterprise customers. This managed service is available in the United States and will be available in other locations around the world this fall.

AT&T also says it will have MPLS-based hosting services that support IPv6 for enterprise customers by the end of 2010. AT&T says its enterprise customers will see more IPv6-oriented testing in the first half of 2011 and additional product releases in the second half of 2011.

"AT&T has been understandably quite reticent to switch its network to IPv6 because they have to re-do security, get new routers, swap out some of its servers, storage and applications," Posey says. "It's going to cost them tens of millions of dollars. … I think they're waiting until they have to do it so Wall Street won't get as mad at them."

Smaller rivals outpace AT&T

Rival U.S. carriers appear to be outpacing AT&T in sales of IPv6-enabled Internet access.

Hurricane Electric, for example, said Tuesday that its IPv6 network had nearly doubled in size in the last year, now connecting to more than 1,000 other IPv6 networks around the world. Among Hurricane Electric's newest IPv6 customers are Facebook and Cisco.

NTT America, which has offered native, dual-stack and tunneled IPv6 service globally since 2004, said it is seeing an increase in IPv6 sales to Web hosting companies, DNS providers and managed security services providers. Among NTT America's high profile IPv6 customers is the Federal Aviation Administration.

"A year ago, about 15% of our customers had purchased dual stack. Now, we see about 25% of our new customers are purchasing dual-stack transit," says Chris Davis, senior director of corporate marketing communications for NTT America. "We have well over 110 gigabits of provisioned capacity of dual stack….That provisioned capacity has doubled in the last year."

Davis admits that much of NTT America's provisioned IPv6 capacity is not yet carrying IPv6 traffic. "But the number of IPv6 routes that we see are increasing," he says.

Davis added that he believes AT&T is lagging NTT America on IPv6. "If they had the type of network availability we have, they'd be talking about it," he says.

Global Crossing also has seen the adoption rate for its IPv6-based Internet access services rise, hitting 15% of all new customer orders in the fourth quarter of 2010 from 10% in the first quarter of the year.

"Although we're up to 15% of all new orders including IPv6, we don't have measurement technology to tell us how many of those customers are actually using it," admits Dave Siegel, vice president of IP services product management at Global Crossing.

Global Crossing tunnels IPv6 traffic over its MPLS core using a technique called 6PE. The devices at the edge of the carrier's network support dual stack IPv4 and IPv6 capabilities.

Siegel says only two of Global Crossing's 2,500 enterprise customers are serious about deploying IPv6 on their MPLS-based VPNs. These customers include one media and entertainment business that is based in Japan and leases its IPv4 address space. The other is a large software vendor that is IPv6-enabling its products. "There are not very many people that are swallowing that [IPv6] frog yet," Siegel says.

Siegel predicts that the transition to IPv6 is going to take a long time. Even after IPv4 addresses are depleted, there will be a market for companies to buy and sell IPv4 addresses that will prevent some of them from upgrading to IPv6, he warns.

If Siegel is right, then AT&T may have plenty of time to get its IPv6 products ready before a flood of U.S. customers arrive.

Indeed, some Internet industry executives are confident that AT&T will get its IPv6 act together before the crunch of IPv4 address depletion is felt by corporate network managers.

"AT&T is more active on IPv6 than it looks from the outside," said the CTO of a major cloud computing vendor. "It doesn't look like they are doing as much as they are."